FBM KLCI to test 1,700-point level next week

KUALA LUMPUR,. The FBM KLCI is likely to test the resistance level of 1,700-point next week with outlook hinges upon progress of the trade discussion between the US and China.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said remarks from the two world’s largest economies would be closely scrutinised in the run-up to their meeting at the end of the month.

According to news reports, Chinese Vice-Premier Liu He would likely visit Washington on Jan 30 and 31 for further trade talks.

“Based on the interest rate futures, it appears that the market has been expecting no hike in the Federal Fund rate this year. Therefore, should the positive sentiment continues, the FBM KLCI might increase towards the resistance level of 1,700 points.

“However, technical indicators such as stochastic is lingering at overbought position. This signals the FBM KLCI is still fragile in the immediate terms,” he told Bernama.

For the week just ended, the FBM KLCI was traded mostly higher, mainly influenced by external factors such as US Federal Reserve’s dovish stance on interest rate hikes and the potential US-China trade negotiations.